Suddenly you are faced with a terrifying thought: What if I lose my car?
Here is what you need to know: You are not powerless, and you have legal rights!
The National Credit Act (NCA) of 2005 offers legal protection to consumers. IF you act in time, you can prevent your car from being repossessed, through a process called debt review / debt counselling.
What is Asset Repossession?
Asset repossession normally happens when a credit provider reclaims a financed item after a consumer defaulted on the repayments.
The National Credit Act (NCA) strictly regulates how and when a creditor my reposses these assets. We would like you to know what the law actually says regarding repossession. This is particularly important if you are behind on your payments and worried that you might lose your car.
What the Law Says
The National Credit Act (NCA) was introduced to promote fair credit practices and protect South African consumers from reckless lending and unfair treatment. This includes creditors needing to follow proper legal procedures before taking action against consumers, including the repossession of assets such as a vehicle or home.
What Needs to Happen BEFORE Your Vehicle is Repossessed:
1) You must receive a Section 129 Notice
If you have defaulted on payments for your vehicle, the creditor must issue you with a Section 129 Notice. This formal letter notifies you of your arrears, and it gives you the opportunity to:
- Pay the outstanding amount to bring your account up to date, OR
- To seek assistance such as applying for debt review (also known as debt counselling).
This Section 129 notification is a critical point in the process, as it gives you the opportunity to act before the situation escalates.
2) A Court Order is Required for Repossession: Section 130
Section 130 of the National Credit Act (NCA) provides the formal legal process that credit providers must follow BEFORE taking enforcement action against consumers, for example, before they repossess an asset (vehicle or home).
If you do not respond to the Section 129 Notice, AND, if no formal arrangement is made after you receive the Section 129 Notice, then the creditor may apply to the court for a judgment and a warrant of execution. If the court grants this, the sheriff of the court is then allowed to repossess your vehicle.
IMPORTANT: Know Your Rights!
Credit providers are NOT ALLOWED to repossess your vehicle without a valid court order. If this happens, the repossession may be deemed to be unlawful, and it can be challenged
The law states that you have the RIGHT to:
- Ask to see the Court Order and warrant of execution.
- Refuse repossession if these documents are not presented.
- Contact a legal advisor or debt counsellor immediately if you suspect an illegal repossession attempt.
3) Voluntary Surrender of Vehicle
If you realise that you can no longer afford your vehicle, Section 127 of the National Credit Act allows you to voluntarily surrender it to the creditor. This protects consumers by giving them a legal way to terminate (end) a credit agreement and reduce their financial obligations.
KNOW YOUR RIGHTS:
Watch this Annaline van der Poel video! Our Debt Rescue Chief Operations Officer explains all about your rights BEFORE you hand over the keys to your car. This is a MUST-WATCH video:
Repossession Risks: What You Need to Know:
Unfortunately, repossessions have serious financial consequences:
- If your vehicle is repossessed it will probably be sold at an auction for LESS than the market value. If the proceeds of this sale do not cover the amount that you owe, you will still be liable for the shortfalls (to pay the difference). PLUS, you will have to pay the legal and storage fees of your vehicle.
- Repossession can seriously impact your credit record, which can make it difficult to access credit in the future.
- Losing your vehicle can impact your ability to work and earn an income.
This is why it is so incredibly crucial that you act early, and that you consider your legal right of debt review, BEFORE any legal action is taken against you and your vehicle.
Fallen Behind on Your Vehicle Payments? Here’s what You NEED to Know:
If you have missed any payments on your vehicle, or, if you have received a Section 129 letter, here are the things you need to do:
- Act quickly! Once a court judgment has been granted, your options become limited. Reach out for help with your debt BEFORE the sheriff repossesses your car.
- Do not sign any repossession documents without understanding what they mean.
- Contact Debt Rescue. We will evaluate your financial situation, and, if you are placed under debt review your vehicle will be safeguarded from repossession.
- Know your rights as a consumer. Repossession without a court order is NOT legal.
Debt Review CAN Protect your Vehicle Against Repossession!
If you apply for debt review BEFORE a judgment is granted, this can stop repossession in its tracks!
Let Debt Review Protect You and Your Vehicle:
1) You receive legal protection from creditors
Once you are placed under debt review, creditors can no longer proceed with any legal action, contact you, or repossess your vehicle (provided that a court judgment has not already been issued)
2) Affordable, Court Approved Debt Repayment Plan
A registered debt counsellor will assess your income and expenses and propose a new debt repayment plan. All your debt is consolidated into one affordable monthly instalment.
3) You keep your car, while PAYING LESS per month.
If your vehicle finance is included in the repayment plan, it means you will now pay off your vehicle over a longer period, at a reduced amount, without the threat of losing it through repossession.
Need Help?
Thousands of South Africans are facing the threat of repossession. What matters is how you respond. The sooner you act, the sooner you contact us, the more options we have to protect you and your future.
Debt Review offers a legal and affordable way to restructure your debt, but most importantly, it helps to protect your assets, such as your car, from repossession.
Contact us today for a free, no- obligation assessment.